RaetsMarine P&I Malaysia

Transcription

1 RaetsMarine P&I Malaysia Shipowners Compulsory Marine Liability Scheme Policy Wording 2016 Version 2

2 Contents PART 1 PROTECTION & INDEMNITY (CLASS 1)... 1 SECTION 1 ABANDONMENT/REPATRIATION, ILLNESS, INJURY AND LOSS OF LIFE [Crew]... 1 SECTION 2 FIXED AND FLOATING OBJECTS... 1 SECTION 3 POLLUTION RISKS... 2 SECTION 4 WRECK REMOVAL... 2 SECTION 5 PASSENGER LIABILITY (optional)... 3 PART 2 GENERAL TERMS AND CONDITIONS... 4 SECTION 6 APPLICATION OF TERMS... 4 SECTION 7 APPLICATION FOR INSURANCE... 4 SECTION 8 CERTIFICATE OF INSURANCE... 4 SECTION 9 EXCLUSIONS AND LIMITATIONS... 4 SECTION 10 PAYMENTS TO THE COMPANY... 6 SECTION 11 CESSER OF INSURANCE... 7 SECTION 12 EFFECT OF CESSER OF INSURANCE... 8 SECTION 13 FLEET INSURANCE... 8 SECTION 14 DOUBLE INSURANCE... 8 SECTION 15 CLAIMS... 9 SECTION 16 MAXIMUM INSURED AMOUNT...11 SECTION 17 DEDUCTIBLES...11 SECTION 18 JOINT ASSUREDS AND CO-ASSUREDS...11 SECTION 19 DISPUTES BETWEEN ASSUREDS...12 SECTION 20 INTEREST AND SET OFF...13 SECTION 21 DOCUMENTATION...13 SECTION 22 FLAG STATE & STATUTORY REGULATIONS...13 SECTION 23 CLASSIFICATION...13 SECTION 24 CONDITION, OTHER SURVEYS AND INSPECTIONS...14 SECTION 25 ASSIGNMENT...15 SECTION 26 FORBEARANCE AND WAIVER...15 SECTION 27 ADMISSION AND SETTLEMENT...15 SECTION 28 SUBROGATION...15 SECTION 29 NOTIFICATION AND TIME LIMIT...16 SECTION 30 TOTAL ASBESTOS EXCLUSION...16 SECTION 31 LAW AND JURISDICTION...16 SECTION 32 MARINE INSURANCE ACT...16 SECTION 33 SANCTIONS LIMITATION AND EXCLUSION CLAUSE...16 PART 3 - DEFINITIONS...17 A

3 PART 1 PROTECTION & INDEMNITY (CLASS 1) The Company shall indemnify the Assured against the Legal Liabilities, costs and expenses under this Class of Insurance, which are incurred in respect of and only in connection with the Operation of the Insured Vessel, arising from Events occurring during the Period of Insurance, and arising from. SECTION 1 ABANDONMENT/REPATRIATION, ILLNESS, INJURY AND LOSS OF LIFE [Crew] 1.1 Liability to pay sick wages/compensation/medical expenses for physical injury due to accidents on board vessel, illness caused solely by occupational hazards and does not cover pre-existing illnesses or aggravation of pre-existing illness whether discoverable or not before/at/during time of employment or death. 1.2 Liability to pay expenses for crew repatriation incurred under a statutory obligation or contract of service or employment in respect of a member of the crew. 1.3 Exclusions and Limitations Cover under this section is to be limited to an overall limit of USD 10,000 per Crew Maximum 22 days in respect of sick wages each Crew member, but always subject to above Reimbursement will not be made in the absence of an executed written crew contract and reimbursement will not be made to Crew employed in a capacity above their actual qualification There shall be no recovery when the expenses, mentioned under sub-section 1.2, result from termination of a contract or service or employment, any breach by the Assured of any contract, agreement or statute or the sale of the Insured Vessel. SECTION 2 FIXED AND FLOATING OBJECTS 2.1 Liability to pay contact damages or compensation for any loss of or contact damage to any property (including infringement of rights in connection with that property) whether on land or water and whether fixed or moveable, not being another ship or Cargo and incurred during the Operation of the Insured Vessel. 2.2 Exclusions and Limitations No claim shall be recoverable under this section where the liability arises under the terms of any contract or indemnity and would not have arisen but for those terms, unless those terms were previously approved by the Company in writing No claim shall be recoverable under this section in respect of loss of or damage to property that is owned, leased or otherwise within the possession, custody or control of the Assured. 1

4 SECTION 3 POLLUTION RISKS 3.1 The liabilities, losses, damages, costs and expenses set out below under (a) to (d) when and to the extent that they are caused by or incurred in consequence of the accidental or threatened accidental discharge or escape from the Insured Vessel, of oil or any other substance incurred during her Operation: a. Liability for loss, damage or contamination. b. The costs of any measures reasonably taken for the purpose of avoiding or minimizing pollution or any resulting loss or damage together with any liability for loss of or damage to property caused by measures so taken. c. The costs of any measures reasonably taken to prevent an imminent danger of the accidental discharge or escape from the Insured Vessel of oil or any hazardous substance which may cause pollution. d. The costs or liabilities incurred as a result of compliance with any order or direction given by any government or authority for the purpose of preventing or reducing pollution or the risk of pollution, provided always that such costs or liabilities are not recoverable under any other insurance. 3.2 Exclusions and Limitations No claim shall be recoverable under this section where the Assured is solely held liable as owner of the Cargo Any Certificate of Insurance or confirmation of cover pursuant to this policy shall not be deemed to be evidence of financial responsibility under the Oil Pollution Act of 1990 or any similar federal or State law and may not be shown or tendered to the United States Coast Guard or any federal or State agency as evidence of financial responsibility or evidence of insurance. The Company does not consent to be a guarantor In respect of recovery from the Company under this section the value of any property that is or may be deemed to be a hazardous substance which may cause pollution and in respect of which the Assured has obtained any proceeds of sale or other financial recovery whatsoever shall be deducted from and set off against the Company s liability to pay. SECTION 4 WRECK REMOVAL 4.1 Liability for the costs and expenses of raising, removing, destroying, lighting or marking the wreck of an Insured Vessel or of any Cargo, equipment or property which is or was carried aboard such vessel, but always provided that the Assured is obliged by law to perform such operations or bear such expenses. 4.2 Exclusions and Limitations In respect of a recovery from the Company under this section the value of the wreck and anything else salved shall be deducted and set off against the recoverable costs and expenses; 2

5 4.2.2 The Assured shall not have transferred its interest in the wreck prior to the raising, removal, destruction, lighting or marking of the wreck or prior to the incident giving rise to liability, save by abandonment with the Company s approval in writing; The occurrence or event giving rise to the wreck of the Insured Vessel arose during the Period of Insurance of the Insured Vessel. SECTION 5 PASSENGER LIABILITY (optional) Liability for the costs and expenses arising out of the carriage of Passengers in accordance with the terms and conditions as set out below: A Liability to pay damages or compensation: 1. For personal injury, illness or death of a Passenger including hospital, medical or funeral expenses incurred in relation to such injury, illness or death including the costs of forwarding the injured or ill Passengers to destination or return port of embarkation and maintenance of such Passengers ashore. In this paragraph funeral expenses shall include the repatriation of dead bodies. 2. To Passengers on board the Insured Vessel arising as a consequence of a casualty to that vessel, including the cost of forwarding Passengers to destination or return port of embarkation and of maintenance of such Passengers ashore. Provided always that: a. There shall be no right of recovery under any paragraph of this clause unless and only to the extent that the Company has agreed to provide cover under this clause or under specified paragraphs thereof upon such terms and conditions as they think fit and the Certificate of Insurance has been endorsed accordingly. b. There shall be no right of recovery from the Company in respect of claims relating to cash, cheques, creditcards, negotiable instruments, precious or rare metals or stones, valuables or objects of a rare or precious nature. e. There shall be no right of recovery from the Company under this clause in respect of the contractual liability of a Client for death or injury to a Passenger whilst on an excursion, or proceeding to or from the Insured Vessel in the circumstances where a separate contract has been entered into by the Passenger for the excursion or passage, whether or not with the Client, or whether or not the Client has waived any or all rights of recourse against any subcontractor or other third party. f. There shall be no right of recovery from the Company under this clause in respect of liabilities for personal injury, illness or death, or loss or damage to property, delay or any other consequential loss sustained by any Passenger, by reason of carriage by air, except here such liability occurs during repatriation by air of injured or ill Passengers, or of Passengers following a casualty to the Insured Vessel. 3

6 PART 2 GENERAL TERMS AND CONDITIONS SECTION 6 APPLICATION OF TERMS Any contract of insurance effected pursuant to the Marine Liability Policy for Shipowners shall incorporate the general terms and conditions and the terms and conditions of Class of Insurance 1. The terms and conditions set out in each Class of Insurance in this policy shall prevail over the general terms and conditions in the event of a conflict between them, but any terms appearing in the Certificate of Insurance shall prevail above all others. SECTION 7 APPLICATION FOR INSURANCE Any application shall be in the form supplied by the Company from time to time. The information and particulars given in the course of applying for insurance shall be deemed to form the basis of the contract of insurance between the Company and the Assured. SECTION 8 CERTIFICATE OF INSURANCE 8.1 On acceptance of the application for insurance by the Company, a Certificate of Insurance will be issued by the Company evidencing the terms and conditions of the contract of insurance between the Company and the Assured, which shall also state: Name of Assured on whose behalf the Insured Vessel is insured, the name of the Ship manager of the Insured Vessel and name of any Co-assured The Class of Insurance and any special terms and/or warranties; The name and main details of the Insured Vessel(s) The Attachment Date of the Insured Vessel(s) and the Period of Insurance The maximum amount insured The applicable Deductibles. 8.2 If at any time during the Period of Insurance the terms relating to any Insured Vessel vary the Company will issue an endorsement stating the terms and effective date of such variation. Any change of information related to the Insured Vessel mentioned in the Certificate of Insurance or information that will influence the insurance risk shall be notified to the Company forthwith. 8.3 Every Certificate of Insurance issued by the Company shall be conclusive evidence as to the terms of the contract of insurance or as to the variation of such terms as the case may be. SECTION 9 EXCLUSIONS AND LIMITATIONS 9.1 The Assured shall not be entitled to recover under any part or Class of Insurance, if: The Assured has failed to exercise reasonable care in the chartering, ownership, operation or management of the Insured Vessel The Assured has failed to promptly provide the Company or its nominated representative with any information or documentation relating to any claim or dispute under this policy The claim or dispute is between Joint Assureds or between Associated persons. 4

7 9.1.4 The claim or dispute arose out of or consequent upon the Insured Vessel carrying illegal goods, contraband, blockade running or the Assured recklessly or intentionally employed or caused the Insured Vessel to be employed in an unlawful or unduly hazardous or improper trade or voyage or that the Cargo carried and/or the method of its securing or unsecuring, carriage, loading, discharging, inspection, maintenance, treatment or lack thereof during the voyage or discharging was unduly hazardous, patently inappropriate or improper The liabilities, costs, losses or expenses are caused by: a) War, civil war, revolution, rebellion, insurrection, terrorist act or civil strife arising therefrom, or any hostile act by or against a belligerent power; b) Capture, seizure, arrest, restraint or detention (barratry and piracy excepted) and the consequences thereof or any attempt thereat; c) Any weapons of war, unless by reason of transport on the Insured Vessel; d) Nuclear risks; e) Ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel; f) The radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof; g) Any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter; h) The radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive matter. The exclusion in this sub-clause does not extend to radioactive isotopes, other than nuclear fuel, when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful purposes; i) Any chemical, biological, bio-chemical or electromagnetic weapon; j) Cargoes that are not carried in accordance with the specific international guidelines applicable including, but not limited to, the IMDG, IBC or IMSBC Code; or which are carried on vessels that do not comply with the requirements as set for the carriage of such Cargoes; k) Wilful misconduct on the part of the Assured, such misconduct being an act intentionally done, or a deliberate omission by the Assured, with knowledge that the performance of omission will probably result in injury, or an act done or omitted in such way as to allow inference of a reckless disregard of the probable consequences The Insured Vessel has been, or is intended to be, employed in trades or areas other than those agreed with the Company The liability is imposed on the Assured as punitive or exemplary damages, howsoever described The claim, liability or expenses are covered under any other policy The claim is in respect of liability, losses, costs and expenses incurred during the course of performing Specialists Operations, to the extent that these arise as a consequence of: 5

8 a. claims brought by any party for whose benefit the work has been performed, or by any third party (whether connected with any party for whose benefit the work has been performed or not) in respect of the specialist nature of the operations; or b. the failure to perform such Specialist Operations by the Assured or the fitness for purpose and quality of the Assured s work, products or services, including any defect in the Assured s work, products or services; or c. any loss of or damage to the contract work including, but not limited to materials, components, parts, machinery, fixtures, equipment and any other property which is or is destined to become a part of the completed project which is the subject of the contract under which the ship is working, or to be used up or consumed in the completion of such project. This exclusion shall not apply to liabilities, losses, costs and expenses incurred by the Assured in respect of: i.) Loss of life, injury or illness of Crew and other personnel on board the Insured Vessel; or ii.) The wreck removal of the Insured Vessel; or iii.) Oil pollution from the Insured Vessel; but only to the extent that such liabilities, losses, costs and expenses are covered by the Company in accordance with the policy wording The claim is in respect of liability, losses, costs and expenses arising out of the carriage of Passengers, unless agreed by the Company in writing prior to attachment The liability arises under the terms of any contract or indemnity and would not have arisen but for those terms, unless those terms were previously approved by the Company in writing Subject only to section below, in no case shall this insurance cover loss, damage, liability or expense directly or indirectly caused or contributed to by or arising from the use or operation, as a mean of inflicting harm, of any computer, computer system, computer software programme, malicious code, computer virus or process or any other electronic system Where this section is endorsed on policies covering risks of war, civil war, revolution, rebellion insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power, or terrorism or any person acting from a political motive, section shall not operate to exclude losses (which would otherwise be covered) arising from the use of any computer, computer system or computer software program or any other electronic computer system in the launch and/or guidance and or firing mechanism of any weapon or missile There shall be no recovery under any part or Class of Insurance in respect of any liabilities, costs or expenses which would be recoverable under the Insured Vessel s Hull Policies There shall be no recovery under any part or Class of Insurance in respect of any deductible provided for under the terms of the Insured Vessel s Hull Policies. SECTION 10 PAYMENTS TO THE COMPANY 10.1 Section 53 of the Marine Insurance Act shall not unless otherwise agreed apply. 6

9 10.2 The Assured shall pay the premium strictly as required by the Company in the Certificate of Insurance or as the Company shall specify from time to time. Time shall be of the essence as regards any due date as hereinafter defined If the Certificate of Insurance or other written notification by the Company requires payment to be made in full by a given date or within the period there set out this shall be the due date by which the Assured must pay If the Certificate of Insurance or other written notification by the Company requires payment to be made in instalments by a series of dates or periods as there set out, then each date or period shall count as a due date by which the Assured must pay although it is expressly agreed that the instalment payments do not render the policy severable The Company may require the Assured to pay all or any part of any premium due in such currency as the Company may specify No claim of any kind whatsoever by the Assured against the Company shall constitute any right of set-off against the premiums or other sums due to the Company or shall entitle the Assured to withhold or delay payment of any premiums or other sums due under this policy on the due date Where the Assured has failed to pay, either in whole or in part, any premium by a due date notwithstanding that, in relation to instalment payments, the Assured may have paid any prior amount(s) by the due date(s), the Company shall have the right to serve a notice upon the Assured requiring him to pay the premium by any date specified in such notice, not being less than seven days from the date on which notice is given. If the Assured fails to make such payment in full on or before the date so specified, this insurance shall be cancelled forthwith without further notice of any other formality. The effect of such cancellation shall be as set out in section 8.1 below. Notwithstanding that the insurance has been cancelled by virtue of this section, the Assured shall be liable for all or any amounts which have fallen due under this policy prior to such cancellation The Company shall be entitled, once premiums and other sums have become due and payable, to commence an action against the Assured or any other liable person, for the recovery of these amounts. SECTION 11 CESSER OF INSURANCE The Assured shall cease to be insured by the Company in respect of all Insured Vessels upon the happening of any of the following: 11.1 In respect of the Assured: If there is a change of management or ownership of the Insured Vessel If the Assured is served in accordance with section 9.5 with a notice by the Company requiring him to pay any amount due to the Company and he fails to pay such amount on or before the date specified in such notice Where the Assured is an individual, upon his death or if a receiving order shall be made against him or if he shall become bankrupt or make any composition or arrangement with his creditors generally or if he shall become incapable by reason of mental disorder of managing and administering his property and affairs. 7

10 Where the Assured is a corporation, upon the passing of any resolution for voluntary winding up (other than voluntary winding up for the purposes of company or group reorganisation) or upon an order being made for compulsory winding up or upon dissolution or upon a receiver or manager of all or part of the corporation s business or undertaking being appointed or upon possession being taken by or on behalf of the holders of any debentures secured by a floating charge of any property comprised in or subject to the charge In respect of the Insured Vessel: If the Insured Vessel becomes a total loss or is accepted under the Hull or War Risks Policies as being a constructive, compromised or arranged total loss. The Company will be entitled to receive full annual premium in case the Insured Vessel becomes a total loss or is accepted under the Hull or War Risks Policies as being a constructive, compromised or arranged total loss If the Insured Vessel is missing for 10 days from the date she was last heard of, or upon her being posted at Lloyd s as missing, whichever shall be the earlier If the Insured Vessel is requisitioned by a State or government authority. SECTION 12 EFFECT OF CESSER OF INSURANCE 12.1 If the cesser of the insurance occurs because of a cancellation for failure to pay premiums, the Assured shall cease to be insured as from the Attachment Date and the Company shall not be liable for any claims of whatsoever nature in respect of any Insured Vessel under this policy, whether the incident giving rise to such claim occurred before or after the cesser of this insurance and notwithstanding the Company may have admitted liability for or appointed lawyers, surveyors or any other person to deal with any claims or the Company has posted or promised security. The Assured must in all cases make alternative arrangements for the defence or prosecution of any claims and for the provision of substitute security and do all things necessary to take over and handle any claims as prudent uninsured If the cesser of insurance occurs for any other reason, the Company shall remain liable for all claims under this policy arising from any incident which occurred before the cesser but shall be under no liability in respect of any claim arising out of any occurrence or Event after the cesser. SECTION 13 FLEET INSURANCE If it is agreed between the Assureds and the Company that the Insured Vessels are subject to Fleet Insurance then the debts of any one Assured in respect of any such Insured Vessel shall be treated as a debt to the Company of all other Assureds whose vessels are or were insured as part of the same fleet and the Company shall be entitled to act as if all the vessels forming part of the fleet were entered by the same Assured. SECTION 14 DOUBLE INSURANCE 14.1 There shall be no recovery from the Company of any claim in respect of liabilities or expenses which are recoverable under any other insurance effected by the Assured. 8

11 14.2 The Company shall not be liable for any franchise, deductible or deduction of a similar nature borne by the Assured under such other insurance. SECTION 15 CLAIMS 15.1 Upon the occurrence of any casualty, Event or matter liable to give rise to a claim by the Assured against the Company, it should be the duty of the Assured and his agents to take and continue to take all such steps as may be reasonable for the purpose of averting or minimising any expense or liability in respect of which he may be insured by the Company. If the Assured commits any breach of this obligation the Company may reject any claim by him It is a condition precedent to the Company s liability hereunder that the Assured shall give prompt notice in writing to the Company of any claim, dispute, matter or Event which has arisen or has occurred and which is liable to give rise to a claim under this policy, and shall provide the Company with all relevant facts of which the Assured has knowledge at the time of any notification If the Assured makes any request for payment under this policy knowing it to be fraudulent or false in any respect (or in circumstances where it ought reasonably to be known to be so) or where the Assured colludes with a third party with a view to making a fraudulent claim hereunder then this policy shall be rendered automatically void and the Assured will forfeit all benefit under it and it shall be of no further effect. The Company shall be entitled to retain all and any premium already paid and to obtain a full indemnity from the Assured in respect of any costs and disbursements incurred by the Company in relation to the claim and in relation to the investigation of the Assured s conduct If the Assured becomes insolvent during the course of any claim to which the Company has given support, the Company shall thereupon reserve the right to withdraw that support forthwith The Assured must at all times promptly provide the Company of any documents, reports, evidence or other information relevant to any claim, dispute, matter or Event which has led or which is liable to lead to a claim under this policy, and which are in the possession or power of the Assured or his agents or otherwise within his knowledge When so requested by the Company, the Assured shall promptly produce, or cause his agents promptly to produce, all such documents or information of whatsoever nature which are or may be relevant to the Assured s claim or intended claim The Assured shall permit the Company or his appointed agent or servant to interview any servant or agent or other person who may have been working for the Assured at the material time or at any time thereafter or whom the Company consider likely to have any direct or indirect knowledge of the matter giving rise to a claim under this policy Any lawyer, surveyor or other expert or adviser shall be selected by the Company. The Company may, at its sole discretion, approve or decline any suggestions of the Assured in this regard. A lawyer, surveyor, expert or other adviser so selected shall be appointed and employed solely on the basis: That they are employed by the Assured who shall be deemed their principal That they have standing instructions from the Assured at all times to give advice and report to the Company directly without prior reference to the Assured and shall produce to the Company any and 9

12 all relevant documents or information obtained by them whether from the Assured or howsoever and whether or not such advice, reports, documents or information would otherwise be the subject of legal or any form of privilege as if they had been appointed to act at all times and had at all times been acting on behalf of the Company and the Company may at any time whatsoever rely upon such advice, reports and documentation or information as it in its absolute discretion deems fit, including but not limited to, the provision of further support and on coverage under the policy That notwithstanding section above, any reports or advices given pursuant to this section shall not bind the Company to any course of action That they shall provide costs and disbursement estimates to the Company at the Company s request. If so advised by the Company in writing, no legal costs and expenses shall be incurred by them without the Company s express prior approval The Company is under no obligation to provide bail or other security on behalf of the Assured, but from time to time the Company may in its sole discretion decide to provide bail or other security on such terms and in such form as the Company in its sole discretion may consider appropriate Where legal steps or other proceedings are undertaken by lawyers or other parties appointed by the Assured or its agents, the Company has the discretion to decline to pay for such legal services. The Company furthermore has the right to control or direct the conduct of handling of any case or legal and other proceedings relating to any matter in respect whereof legal and other costs are covered and to require the Assured to settle, compromise or otherwise dispose of the case or legal and other proceedings in such manner and upon such terms as the Company deems necessary. The Company shall be under no liability to reimburse an Assured for costs incurred before the Company has been notified of a claim under the cover The provision by the Company of bail or other security, or otherwise acting on behalf of the Assured, shall not constitute an admission of liability by the Company for the claim in respect of which the bail or other security is given The provision by the Company of bail or other security is always subject to payment to the Company of the applicable Deductible(s) and all outstanding premiums It is a condition precedent to the Assured s right of recovery under this policy with regard to any claim by the Assured in respect of any loss, expense or liability, that the Assured shall first have discharged any loss, expense or liability Where the Company has indemnified the Assured for any claim under this policy, the Company shall be entitled to any recovery from a third party in respect of that claim and the Assured shall, upon first request of the Company, provide all documents to enable the Company to exercise the Assured s rights of recovery Where the Assured as a consequence of an event which is covered by the Company obtains extra revenue, saves expenses or avoids liability or loss which otherwise would have been incurred and which would not have been covered by the Company, the Company shall be entitled to recover from the Assured or retain from any sum which would otherwise be payable to the Assured, an amount equivalent to the benefit obtained by the Assured. 10

13 15.16 Notwithstanding section 15.13, where the Assured has failed to discharge a legal liability to pay damages or compensation for personal injury, illness or death of a crew member, or costs of repatriation under the Maritime Labour Convention 2006 or any materially similar enactment, the Company shall discharge or pay such claim on the Assured s behalf directly to such Crew member or dependent thereof, provided always that: a) The Crew member or dependent has no enforceable right of recovery against any other party and would otherwise be uncompensated, b) The amount payable by the Company shall under no circumstances exceed the amount which the Assured would otherwise have been able to recover from the Company under the policy and the Assured s terms of cover as per this Certificate of Insurance, and c) Any payment in respect of costs of repatriation made under this provision shall be done by the Company as agent of the Assured only and the Assured shall be liable to reimburse the Company for the full amount of such payment. SECTION 16 MAXIMUM INSURED AMOUNT The maximum liability of the Company under this policy in respect of each accident or occurrence relating to the Insured Vessel and falling within the Period of Insurance shall be limited to the amount(s) specified in the Certificate of Insurance. SECTION 17 DEDUCTIBLES 17.1 Any claim recoverable under this policy shall be limited to the excess of the Deductibles specified in the Certificate of Insurance The Assured shall pay the Deductible on or before the date specified by the Company Where an Assured has failed to pay, either in whole or in art, any amount due from the Assured to the Company, the Company shall have the right to serve a notice upon the Assured requiring him to pay such amount by any date specified in such notice, not being less than seven (7) days from the date on which notice is given. If the Assured fails to make such payment in full on or before the date so specified, the insurance of the Assured shall be cancelled forthwith without further notice or formality. Notwithstanding that the insurance has been cancelled by virtue of this clause, the Assured shall be liable for all or any amounts which have fallen due under this policy prior to such cancellation The Company shall be entitled, once Deductibles have become due and payable, to commence an action against the Assured or any other person liable, to recover any unpaid Deductible. SECTION 18 JOINT ASSUREDS AND CO-ASSUREDS 18.1 The Company may accept an Insured Vessel owned by more than one party or managed by another company than the Assured, in which case each party shall be a Joint Assured Joint Assureds shall be jointly and severally liable to pay all amounts due to the Company If an application is made by two or more vessels forming part of a fleet through a Ship manager with a view to obtaining terms which would not have been available had the vessels been offered for 11

14 insurance separately, such insurance may be accepted on the basis that the Ship manager shall sign the appropriate Application Form and be treated as a Joint Assured and shall together with the Assured be jointly liable as Assured Any payment by the Company to the Assured or any one of the Joint Assureds, shall be deemed to be complete payment to the Assured and to all Joint Assureds jointly and shall fully discharge the obligations of the Company in respect of that payment The contents of any communication between the Company and the Assured, or any Joint Assured or any Co-assured, shall be deemed to be within the knowledge of the Assured and all Joint Assureds and Co-assureds Any failure by the Assured, or any Joint Assured, or any Co-assured to comply with any of the obligations under this Policy of Insurance, shall be deemed to be a failure of the Assured and all Joint Assureds and Co-assureds Any conduct or omission (including misrepresentation or non-disclosure) by the Assured, or any Joint Assured or any Co-assured, which would have entitled the Company to reject or reduce any claims shall be deemed to have been the failure of the Assured and all Joint Assureds and Co-assureds The Company shall not cover any liability, loss, expense or costs in respect of any dispute between the Assured and any Joint Assured and any Co-assured, or between Joint Assureds or between Co-assureds or between Joint Assureds and Co-assureds arising out of or relating to the subject matter of this Policy The total liability of the Company in respect of any one Event, to the Assured, and to any Joint Assured or Co-assured shall not exceed such sum as would have been recoverable from the Company only by the Assured In the event that the total liability of the Company is less than the total sum claimed by the Assured and by any Joint Assured or Co-assured, the Company shall be entitled to apportion payment in proportion to the respective amounts claimed The Company may agree to extend the Policy of Insurance to a Co-assured named in the Certificate of Insurance In respect of a Co-assured the Company shall only be liable to the Co-assured to the extent that it would have been liable to the Assured had the claim in question been brought and enforced against the Assured A Co-assured shall not be liable for amounts due to the Company by the Assured. SECTION 19 DISPUTES BETWEEN ASSUREDS In the event of a dispute between Assureds insured with the Company, the Company may insist that the dispute in question shall be submitted to the Company and/or to a legal, technical or other expert appointed by the Company, for an opinion prior to the commencement of court proceedings or arbitration. Any such opinion may not be referred to in any subsequent proceedings, but may be taken into account by the Company in determining to what extent the Company shall cover the costs of either Assured. 12

15 SECTION 20 INTEREST AND SET OFF 20.1 In no case whatsoever shall interest be paid on any amount due from the Company The Company shall be entitled to set off any amount due from the Assured against any amount due to the Assured. SECTION 21 DOCUMENTATION It is warranted that the Insured Vessel, its Crew and its Cargo shall, at all times, be properly documented, unless otherwise agreed in writing between the Assured and the Company. Should the Insured Vessel at any time to the knowledge of the Assured or any of its officers, or should any of them be reckless in relation thereto, carry false papers relating to the operation of the vessel, the qualifications, number or competence of the Crew, or as to the nature or condition of the cargo then this policy shall be rendered automatically void and the Assured will forfeit all benefit under it and it shall be of no further effect. SECTION 22 FLAG STATE & STATUTORY REGULATIONS 22.1 It is warranted that the Insured Vessel is registered in a particular country and sails under a particular flag and/or management and shall remain so during the entire Period of Insurance It is warranted that the Assured shall comply with all statutory regulations, laws, and directions relating to the construction, adaptation, condition, fitment and equipment of the Insured Vessel throughout the entire Period of Insurance It is warranted that the Assured shall maintain the validity of all statutory or other certificates as are issued by or on behalf of the Insured Vessel s flag State in relation to the International Safety Management (ISM) Code and the International Ship and Port Facility Security (ISPS) Code throughout the entire Period of Insurance It is warranted that the Insured Vessel is to be crewed and manned in accordance with the statutory regulations, laws and directions applying to the Insured Vessel by virtue of its registry or flag and shall comply with the statutory regulations, laws or decrees relating to crewing and manning in each port which the Insured Vessel visits, whether or not in the course of its employment. SECTION 23 CLASSIFICATION 23.1 It is warranted that the Insured Vessel is and shall remain throughout the Period of Insurance fully classed with a Classification Society approved by the Company, and that any change of Classification Society shall forthwith be notified to the Company in writing. The Assured shall fully and timeously comply with all rules, recommendations and requirements of the Classification Society and will promptly report to the Classification Society and the Company any incident or condition in connection with the Insured Vessel The Assured irrevocably authorises the Company to inspect and copy information relating to the maintenance of classification either in the Assured s possession or in the possession of the Classification Society and the Assured will at the request of the Company confirm in writing that the 13

16 Company is entitled to inspect and copy such records of the Classification Society for whatever purpose the Company may deem necessary It is warranted that during the Period of Insurance the Insured Vessel shall be classed and maintained in class without any extensions or postponements from the Classification Society of their survey dates. It is further warranted that any recommendations by the Classification Society in relation to the Insured Vessel will be complied with immediately. SECTION 24 CONDITION, OTHER SURVEYS AND INSPECTIONS The provisions of this section shall not derogate from the warranties of the Assured in relation to those matters set out in sections 21, 22 and 23. This section contains the entitlement of the Company to review the condition of the Insured Vessel prior to inception and throughout the Period of Insurance and in appropriate circumstances to amend the insurance coverage provided The Assured shall strictly comply with any survey warranty set out in the Certificate of Insurance relating to the Insured Vessel. The Company may, as a condition precedent to the inception of the Policy of Insurance or on a held covered basis or on such other terms as it in its sole discretion may decide, require the Insured Vessel to be surveyed by a Company approved surveyor on a date and at a place satisfactory to the Company, but at the Assured s expense. Unless and until any repairs or other action have been carried out to the satisfaction of the Company and within the time prescribed by the approved surveyor, the Policy of Insurance shall not be in full force and effect or shall be restricted to such special terms as the Company may, in its discretion, agree The Assured shall provide the Company with all information, documents and photographic or other evidence as to the condition, maintenance and operation of the Insured Vessel, including her whereabouts, throughout the entire Period of Insurance as the Company or its approved Surveyor(s) may reasonably request. It is a continuing obligation upon the Assured promptly to notify and to provide the Company with all relevant documentation concerning any incident or matter that may affect the Insured Vessel s condition during the Period of Insurance including, but not limited to, intervention by Port State Control, a casualty, a direction or other order by a State or port regulatory authority that requires repairs, improvement or some remedial step to the Insured Vessel The Assured shall permit the Company, at any time, to carry out a survey of the Insured Vessel by a surveyor or other expert appointed by the Company but at the Assured s expense on a date and at a place satisfactory to the Company. In the light of the surveyor s recommendations following such survey the Company shall be entitled: To terminate the Policy of Insurance immediately on provision to the Assured of the surveyor s findings, when the Assured shall cease to be insured. The Company shall, tender an appropriate prorata per day return as soon as reasonably practicable To impose conditions and restrictions or otherwise vary the Policy of Insurance as the Company may, in its sole discretion, deem appropriate including, without limitation, the exclusion of all or part of the perils insured against in Class of Insurance 1, on provision to the Assured of the surveyor s findings. Any condition, restriction, variation or exclusion shall remain in full force and effect unless and until the 14

17 Assured has complied with the recommendations of the survey as to repairs or other action to be taken within such time as may be specified by the Company to the satisfaction of the Company and its surveyor Should the Assured decline to accept any condition, restriction, variation or exclusion imposed by the Company pursuant to section above ( the amended terms ) then it shall have the option of terminating the Policy of Insurance within 7 days of its receipt of the amended terms when the Company shall tender an appropriate pro-rata per day return as soon as reasonably practicable The Company s Condition Survey Guidelines, as from time to time amended, and the Company s P&I Risk Assessment Reports insofar as they relate to the Insured Vessel, shall be patent to the Assured as the basis of the Company s assessments pursuant to sections and SECTION 25 ASSIGNMENT No insurance provided by the Company and no interest in any contract between the Company and the Assured may be assigned without the written consent of the Company, who shall have the right in its sole discretion to give or refuse such consent without stating any reason or to give consent upon any such terms or conditions as the Company may think fit. The Company shall be entitled, before paying any claim to an assignee of the Assured, to deduct or retain such amount as the Company may then estimate to be sufficient to discharge any liabilities of the Assured to the Company, whether existing at the time of the assignment or having accrued or being likely to accrue thereafter. SECTION 26 FORBEARANCE AND WAIVER No act, omission, course of dealing, forbearance, delay or indulgence by the Company, whether by its officers, servants, agents or otherwise, shall be treated as a waiver of any of his rights in respect of any of the terms and conditions in this policy. SECTION 27 ADMISSION AND SETTLEMENT The Assured shall make no admission of liability nor settle any claim or dispute or proceedings instituted by or against it without prior written approval of the Company. If the Assured admits liability or settles the claim or dispute without such prior written approval or refuses to settle the claim, notwithstanding that the Company shall have required it to do so, the Company shall not be liable to indemnify the Assured and the Assured will be liable to refund the Company all or part of any costs paid by the Company either to the Assured or to lawyers, surveyors or other persons. SECTION 28 SUBROGATION The Company shall be subrogated to all the rights which the Assured may have against any other person or entity, in respect of any payment or promise of payment made in accordance with this policy, to the extent of such payment or that promise of payment, and the Assured shall, upon the request of the Company, execute all documents necessary to secure to the Company such rights. The Company shall have the right to sue in the name of the Assured, and the Assured shall execute all papers and 15

18 documents in connection therewith, as requested by the Company, and shall lend all assistance to the prosecution of any suit. The balance of any amount recovered after full reimbursement of the Company for its loss and all expenses incurred shall be paid to the Assured. Compliance with this requirement may, in the Company s discretion, be made a condition of the payment of a loss. SECTION 29 NOTIFICATION AND TIME LIMIT Without prejudice to the duty of prompt notification contained in section 15.2, the Assured s claim against the Company shall be extinguished and the Company shall be under no further liability in respect thereof, if an Assured: a) Fails to notify the Company of any casualty, Event or claim referred to in section 15.2 within one year after he has knowledge thereof or ought to have had knowledge thereof or; b) Fails to submit a claim to the Company for reimbursement of any liabilities, costs or expenses within one year after discharging the same. SECTION 30 TOTAL ASBESTOS EXCLUSION There shall be no recovery from the Company in respect of any liabilities, costs and expenses directly or indirectly arising out of, resulting from or in consequence of, or in any way involving asbestos, or any materials containing asbestos in whatever form or quantity. SECTION 31 LAW AND JURISDICTION 31.1 This policy shall be governed by and construed in accordance with English Law The High Court in London shall have exclusive jurisdiction to hear and determine any claim or dispute under this policy The Insurance provided by the Company shall not, nor is it intended to, confer any right or benefit on any third party under the Contracts (Rights of Third Parties) Act 1999 or any similar provision, enactment or principle of law contained in the laws of any State which purports to do so. SECTION 32 MARINE INSURANCE ACT This policy and all contracts of insurance made by the Company shall be subject to and incorporate the provisions of the Marine Insurance Act, and any statutory modifications thereof except insofar as such Act or modifications may have been excluded by this policy or by any terms of such contracts. SECTION 33 SANCTIONS LIMITATION AND EXCLUSION CLAUSE There shall be no recovery in respect of any liabilities, costs or expenses where the provision of cover, the payment of any claim or the provision of any benefit in respect of those liabilities, costs and expenses would expose the Company to the risk of being or becoming subject to any sanction, prohibition or adverse action in any form whatsoever by any state or international organisation. 16

19 PART 3 DEFINITIONS Application Form An application for insurance, duly signed by the Assured, in the standard format stipulated by the Company, providing information material to the risk to be insured and which shall be attached and form part of the Policy of Insurance. Associated person A company or other legal entity which controls or is controlled by or is under common control with the Assured. Assured The Person insured under the Policy of insurance and who is stated to be the Assured in the Certificate of Insurance. Attachment Date The first day on which the insurance commences. Certificate of Insurance The document issued by the Company stating the details of risks attached and which is evidence of the contract of insurance including the endorsements provided as per part 2, section 4.2) under the Policy of Insurance. Charter Party A time charter party, a voyage charter party, including contracts of affreightment and booking notes or a space charter party. Class of Insurance Any class of insurance which is referred to in the Policy of Insurance. Co-assured Any Person or company named in the Certificate of Insurance, who is covered on the basis of misdirected arrow only. Company Perlindungan Dan Indemniti Malaysia Sdn Bhd Deductible 17